WASHINGTON PRIME GROUP INC. (NYSE:WPG) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
A.Scottsdale Quarter Block M and Block
K.
On March 29, 2017 (the Effective Date), SDQ III
Fee, LLC and SDQ III Retail, LLC (each a
Borrower and together, the
Borrowers), each an affiliate
of Washington Prime Group Inc. (the Registrant),
completed a mortgage financing transaction secured by certain
real estate parcels known as Blocks M and K (the
Parcels) at Scottsdale Quarter, a retail center
located in Scottsdale, AZ and which Registrants affiliate holds a
51% joint venture ownership interest.
The aggregate amount of the loan (the Loan) is
Fifty-Five Million Dollars ($55,000,000), of which Twenty-Eight
Million Fifty Thousand Dollars ($28,050,000) represents the
Registrants pro-rata share, and is evidenced by two promissory
notes in the following principal amounts: (1) Thirty-Nine Million
Nine Hundred Eighty-Five Thousand Dollars ($39,985,000.00) from
American General Life Insurance Company (AGLIC)
and (2) Fifteen Million Fifteen Thousand Dollars ($15,015,000)
from The Variable Annuity Life Insurance Company (together with
AGLIC, the Lenders and each a
Lender). The Loan is secured by, among other
things, a Deed of Trust, Security Agreement, Fixture Filing and
Assignment of Leases and Rents, dated as of the Effective Date
(the Deed of Trust) which encumbers the Parcels.
The Loan has a fixed interest rate of 4.36% per annum and
scheduled maturity date of April 1, 2027 (the Maturity
Date). Monthly payments under each promissory note shall
consist of interest-only payments on the outstanding principal
until May 1, 2022 at which time monthly repayments shall consist
of principal and interest. Each promissory note prohibits any
prepayment of the respective balance before April 1, 2020 at
which time the Borrowers shall have the right to prepay the full
principal amount of the respective promissory note, all accrued
but unpaid interest and any necessary fees or premiums. Under the
respective promissory note, in the event the Borrowers fail to
pay the outstanding indebtedness under the Loan by the Maturity
Date, the Lender may, at its sole option and discretion, extend
the term of the Loan for an additional five (5) year period. Each
promissory note and the Deed of Trust have default provisions
customary for commericial mortgage loans of this nature. Upon the
occurrence of any event of default under the respective note or
Deed of Trust, the entire balance of principal, accrued interest,
and other sums owing under the Loan, at the option of the Lender,
become due and payable without notice or demand.The Loan is
non-recourse to each Borrower, except as otherwise provided in
the guarantees discussed below.
As part of the Loan transaction described herein, the Registrants
affiliate, Washington Prime Group, L.P. (WPGLP),
executed a Guaranty Agreement, dated as of the Effective Date, to
provide a guaranty to protect the Lenders against losses that
either Lender may incur by reason of certain intentional
misrepresentations, malfeasance or misappropriations by either
Borrower. Additionally, WPGLP and the Borrowers executed an
Environmental Indemnity Agreement, dated as of the Effective
Date, to indemnify Lenders against losses or costs to remediate
damage to the Parcels caused by the presence or release of
hazardous materials. Lastly, the sole member of each Borrower
executed a Limited Recourse Secured Guaranty Agreement, dated as
of the Effective Date, under which each respective guarantor
guaranteed payment and performance of all obligations and
liabilities ofits wholly-owned Borrower under the loan documents
which include, but are not limited to, each promissory note and
the Deed of Trust.
The Registrant used its share of the net proceeds from the Loan
to pay down the balance outstanding on the Registrants credit
facility. The Parcels were previously unencumbered.
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B. |
Pearlridge Center Uptown |
On March 30, 2017 (Uptown Effective Date),
Pearlridge Uptown II, LLC (the Uptown Borrower),
an affiliate of Registrant, completed a mortgage financing
transaction secured by a certain real estate parcel known as
Uptown II (the Uptown Parcel), a part of
Pearlridge Center, a retail center located in Aiea, HI and which
Registrants affiliate holds a 51% joint venture ownership
interest.
The aggregate principal amount of the loan (the Uptown
Loan) is Forty-Three Million Two Hundred Thousand
Dollars ($43,200,000), of which Twenty-Two Million Thirty-Two
Thousand Dollars ($22,032,000) represents the Registrants
pro-rata share, from Bank of America, N.A. (Uptown
Lender). The Uptown Loan is evidenced by a promissory
note secured by a Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing, dated as of the Uptown
Effective Date (the Uptown Mortgage) that
encumbers the Uptown Parcel.
The Uptown Loan has a fixed interest rate of 4.071% per annum
and scheduled maturity date of May 1, 2025 (the Uptown
Maturity Date). Monthly payments under the promissory
note for the Uptown Loan shall consist of interest-only
payments on the outstanding principal balance until April 1,
2019 at which time monthly repayments shall consist of
principal and interest. The promissory note prohibits any
prepayment of the respective balance before February 1, 2025 at
which time the Uptown Borrower shall have the right to prepay
the Uptown Loan in full. The promissory note and the Uptown
Mortgage have default provisions customary for commericial
mortgage loans of this nature. Upon the occurrence of any event
of default under the promissory note or Uptown Mortgage, the
entire balance of principal, accrued interest, and other sums
owing under the promissory note shall, at the option of the
Uptown Lender, become due and payable without notice or
demand.The indebtedness created by the Uptown Loan is
non-recourse to the Uptown Borrower, except as otherwise
provided in the Uptown Guaranty defined below.
As additional collateral for the Uptown Loan, WPGLP executed a
Guaranty Agreement, dated as of the Effective Date (the
Uptown Guaranty), to provide a guaranty to
protect the Uptown Lender against losses that it may incur by
reason of certain intentional misrepresentations, malfeasance,
or misappropriations by the Uptown Borrower. Additionally,
WPGLP and the Uptown Borrower executed an Environmental
Indemnity Agreement, dated as of the Uptown Effective Date, to
indemnify Lender against losses or costs to remediate damage to
the Uptown Parcel caused by the presence or release of
hazardous materials.
The Registrant used its share of the net proceeds from the
Uptown Loan to pay down the balance outstanding on the
Registrants credit facility that was used to fund its share of
the acquistion of the Uptown Parcel on March 2, 2017.
Item 8.01 Other Events.
On March 28, 2017, WPGLP issued a notice to the administrative
agent to extend the maturity date for the term loan under
WPGLPs Revolving Credit and Term Loan Agreement, dated as of
May15, 2014, as amended (the Agreement) from
May 30, 2017 to May 30, 2018. The Agreement was originally
disclosed in a Form 8-K filed with the Securities and Exchange
Commission on May 29, 2014. This extension of the maturity date
is WPGLPs second of three such extension options permitted
under the Agreement. In connection with the exercise of this
extension option, WPGLP will pay an extension fee over four
equal quarterly installments totaling $750,000.
About WASHINGTON PRIME GROUP INC. (NYSE:WPG)
Washington Prime Group Inc., formerly WP Glimcher Inc., is a real estate investment trust (REIT). The Company is engaged in ownership, development and management of retail real estate properties. Washington Prime Group, L.P. (WPG L.P.) is the Company’s subsidiary that owns, through its affiliates, the Company’s real estate properties and other assets. The Company’s assets consist of interests in approximately 120 shopping centers in the United States, consisting of community centers and malls. Its properties consist of approximately 70 million square feet of gross leasable area. The Company also owns parcels of land, which can be used for either the development of shopping centers or the expansion of existing properties. The Company focuses on retail tenant leases, including fixed minimum rent leases, percentage rent leases based on tenants’ sales volumes and reimbursements from tenants for certain expenses. The Company’s properties are leased to various tenants. WASHINGTON PRIME GROUP INC. (NYSE:WPG) Recent Trading Information
WASHINGTON PRIME GROUP INC. (NYSE:WPG) closed its last trading session 00.00 at 8.68 with 1,792,558 shares trading hands.